Israelis who have overdrawn their checking accounts will henceforth be given notice, along with a one-day grace period, to correct the matter, Globes reported.
The pause, which went into effect on Thursday, will enable customers to make a deposit to cover the shortfall and thereby avoid the negative listing as a restricted customer.
Customers will be required to act two and a half hours before the end of the banking day.
Until now, banks were not required to notify their customers that a check was not going to be honored, and may people discovered it only after it already bounced. After 10 such incidents, by law the offender is labeled a ‘restricted customer.’
The change in the law, initiated by MK Yakov Asher (United Torah Judaism), obligates the banks to send a text message to the account holder or leave a recorded phone message warning of the overdraft.
Asher pointed out that his amendment does not only benefit the writer of the check, but also the recipient who will receive the money that is owed.
“This is an important social law of the first rank which will bring about a big revolution in the banking system and correct an injustice that has been around for years. I welcome the Bank of Israel’s campaign to implement a transformation in the banking system. This is good news that will benefit all parties – the customers and the banks,” MK Asher said.